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BarJournal HEALTH CARE LAW

JULY/AUGUST 2015
fEaTUrE Illegal or Just Ill-conceived?

Site Neutrality and the Legal Battle

to Stop Its Implementation

BY LAuRA FRYAN & NICK KOPCHO

n November 2018, the Centers for Medicare offices that are integrated with a hospital to bill 70% of the OPPS rate. In 2020 and beyond,
and Medicaid finalized several changes to the Medicare as a hospital outpatient department CMS will reimburse clinic visits at 40% of
Medicare Hospital Outpatient Prospective and thereby receive higher payments. CMS the OPPS rate. Currently, the OPPS rate for
Payment System (OPPS) that will greatly previously championed provider-based a clinic visit is approximately $116 with $23
Iaffect providers throughout 2019 and beyond. facilities as offering important potential being the average beneficiary copayment. The
One of the most important changes is referred benefits, such as increased beneficiary access adjustment down to the MPFS equivalent rate
to as “site neutrality.” This article will discuss and integration of care, which may improve in 2020 will reduce the payment to $46 and
site neutrality, the implications of this radical quality of care. By contrast, a freestanding a beneficiary copayment of $9. This is what
change in CMS policy, and the ongoing lawsuit facility, like a physician office, furnishes is referred to as site neutrality, signifying
that ensued after the final rule was published. services to Medicare beneficiaries, but not that the provider-based physician offices that
Provider-based status is a Medicare in connection with a hospital. Medicare previously could bill a higher payment rate for
payment designation that allows physician pays for physician services provided in clinic visits will no longer enjoy this privilege.
freestanding facilities using the Medicare This represents a continuing, systematic
Physician Fee Schedule (MPFS). Under the reversal of policy at CMS. The 2015 Bipartisan
MPFS, CMS reimburses the provider for Budget Act effectively quashed the expansion
Niki Z. Schwartz the cost of the physician service (i.e., the of off-campus provider-based departments
professional component) and the operational
by providing that only those off-campus
Mediator/Arbitrator expense for the facility, such as the cost of provider-based facilities that billed for
equipment and overhead (i.e., the facility provider-based services before November 2,
component). In contrast, a provider-based 2015, would continue to receive the higher
facility, which operates under the ownership, provider-based payment after January 1,
administrative, and financial control of a 2017. These grandfathered provider-based
hospital, bills as an outpatient department departments are referred to as “excepted” off-
of the hospital under the OPPS. Provider- campus provider-based departments. CMS
based facilities may be on campus (within then proposed site neutrality for the 2017
250 yards of the main buildings of the main OPPS rule, but did not finalize this proposal.
provider) or off campus (more than 250 This time, in the 2019 OPPS rule, providers are
yards but less than or equal to 35 miles from facing the inevitable implementation of site
the main buildings of the main provider). neutrality. CMS is unabashed about its move
Traditionally, under CMS’s provider-based to promote site neutrality between hospitals
rules, qualifying off-campus physician offices and other outpatient facilities to encourage
“If he can settle have been able to bill for clinic visits and other services to shift from a hospital setting to a
a prison riot, services at the higher OPPS rate, whereas a lower cost setting like an ASC.
On December 4, 2018, in order to stop
freestanding facility bills for the same clinic
he can settle visit at the lower MPFS rate. The final 2019 the implementation of site neutrality, the
anything!” OPPS rule will effectively lower the payment American Hospital Association, a national
advocate for nearly 5,000 hospitals, health care
for clinic visits at such off-campus physician
offices to the equivalent payment under the systems, networks and other providers of care;
MPFS. The affected clinic visit code, HCPCS the Association of American Medical Colleges
216-696-7100 code G0463 (hospital outpatient clinic visit for which is comprised of all 152 accredited U.S.
and 17 accredited Canadian medical schools,
assessment and management of a patient), is
nzs.adr@gmail.com the most common service billed under OPPS. nearly 400 major teaching hospitals and
In 2019, CMS will reimburse clinic visits at health systems, and more than 80 academic
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